Former Obama economist Jason Furman rejected any inflation happy talk on Tuesday, emphasizing that a recession was likely and high prices were not going away "anytime soon."
"I think the markets are just ridiculously complacent about the inflation situation right now. I look at tips, I look at swaps, they have break-evens of inflation of around 2%, I just don’t see that. I don’t see how we have inflation much below 3% this year, I don’t see it coming down below that without a decent-sized recession. And nothing in this number gives me comfort," he said.
Furman joined CNBC's "Squawk Box" on Tuesday to discuss January's inflation numbers and the market's reaction. Inflation rose 6.4% in January on an annual basis and came in higher than expected. The Consumer Price Index, a broad measure of the price of gasoline, groceries and rent, rose 0.5% in January.
Furman also added that anyone who was "calm" about inflation was making him nervous.
JANUARY RENTS HAD THE SMALLEST INCREASE SINCE MAY 2021
"So I think this inflation issue is real. I don’t think it’s going away anytime soon and I think anyone who’s overly calm about it is making me nervous," he continued.
CNBC host Becky Quick said the January numbers prompted a situation where "the market looks at it and says ‘no news is good news.’"
Former Treasury official Nada Eissa told Quick that she expected us to be further along.
"I would have expected that we be further along. It is good news that inflation is not going up, but it’s also not really coming down very much and what worries me still is the labor market. We’ve seen no signs at all that the labor market has slowed down we had a very strong jobs report last month and I still worry that we’re not getting a good handle on that," she said.
ABC, NBC, CBS EVENING NEWSCAST BARLEY SCRUTINIZED BIDEN ON INFLATION, STUDY FINDS
President Biden celebrated the January numbers and touted the Inflation Reduction Act while acknowledging that there is still more work to do.
"Inflation in America is continuing to come down, which is good news for families and businesses across the country. Today’s data confirm that annual inflation has fallen for seven straight months. Inflation for food at the grocery store came down again last month," a statement from the president read.
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The president also accused Republicans of wanting to take us in the "opposite direction" in his statement on January's inflation numbers.
"They are threatening to raise costs for seniors by threatening to cut Medicare and Social Security, and other critical programs that American seniors and families count on. And some are threatening to default on the full faith and credit of the U.S., which would raise costs and create economic chaos. I will stand firmly against any effort to make inflation worse and increase costs for families. Today’s data reinforces that we have made historic progress and are on the right track, and now we need to finish the job," he said.
